Thought Leadership

Is 2019 the Tipping Point for Supply Path Optimization?

December 12, 2018

By Adam Soroca, Head of Global Buyer Team

Supply Path Optimization is the Way Forward

How Supply Path Optimization will grow transparency in ad tech.

Illuminating what lurks in the ad tech black box remains a regular topic amongst the industry leaders and the press as we roll the calendar forward to 2019. And while programmatic spend continues to grow, this looming distrust prevents buyers to go all in on contemporary programmatic buying. Fortunately, the recent transparency movement stands to build buyer confidence through curating efficient, transparent programmatic partnerships while establishing clear industry benchmarks.

Historically, buyers evaluated inventory at the publisher (i.e. CNN) level, regardless of the pipes that delivered those impressions. With header bidding opening access to virtually all publishers via any supply source (exchange), the spotlight now shines on each inventory route’s business and technology practices.

These are the overarching stewards for supply strategy and partnerships for their ad tech organizations. Once charged with on-boarding and maintaining as many supply partners as possible, their recent focus on doing more with fewer is palpable. Supply Path Optimization towards supply partners to ensure great outcomes for clients is their primary objective. Key criteria typically includes:

Auction Dynamics: Is the exchange clear on the way auctions are conducted? Does the exchange offer tools to ensure buyers are not overcharged in first price auctions?

Total Take Rate: How much working media makes it to the publisher?

Ultimately, these are all key ingredients to delivering strong client campaign results. Additionally, the supply partner operating principles are more important now than ever in ad tech. The exchanges demonstrating clean business practices are likely to find themselves in the winner’s circle among this group.

These directors and hands-on-keyboard teams focus on fully delivering budgets that achieve campaign objectives. Simply put, they must spend the client’s or their own money effectively. Consequently, they seek information that relates to brand safety, reach, and KPI performance. These planners and traders are concerned with questions like:

What is the inventory quality? What are the viewability scores? Will I have to deal with significant fraud claims?

Will my campaigns perform to meet campaign objectives?

Media Cost: Are CPMs competitive or inflated?

Auction Dynamics: Is the exchange clear on their approach to inform bidding strategies? Does the exchange offer tools to ensure buyers are not overcharged in first price auctions?

Up until very recently, the direct influencers over where dollars flow typically focused on publisher targeting and optimization. As path choice has become a real thing, this group can now turn its attention to favoring the supply paths that yield the strongest outcomes.

Do your exchange partners pass the “transparency test?”

While no ‘one-size-fits-all’ transparency test exists and the Supply Path Optimization playbook has yet to be written, assessing a programmatic supply partner’s commitment to buyer results is more important now than ever. We are on the doorstep of consolidation and buyers are choosing paths.

As I recently noted, it’s not just about asking the right questions; buyers should also follow through with their investment. If the industry is truly going to move forward, once the most transparent paths to supply have been identified, the money should follow. Ultimately, it’s the power of purchase that will most effectively push the media supply chain to adopt more full-disclosure policies and transparent practices.

For more info about Rubicon Project’s inventory quality, take rates, auction dynamics, supply path optimization, ad tech, or other transparency topics, reach out to us at contact@rubiconproject.com.